The Trade Desk presents a generational buying opportunity, as temporary ad spending headwinds drive its valuation to multiyear lows. Despite Q3 revenue growth slowing to 18% YoY and softer Q4 guidance, TTD's long-term digital ad growth prospects remain robust. Adjusted EBITDA margin expanded to 43% in Q3, and aggressive share buybacks signal management's confidence in future cash flows.
Cathie Wood bought shares of The Trade Desk, WeRide, and Pure Storage on Thursday. The Trade Desk has plummeted 66% this year, but there are signs that the worst is behind its investors.
The Trade Desk has declined by nearly two-thirds year-to-date, transforming from a growth favorite to a value opportunity. Despite decelerated growth and execution issues, TTD's risk appears increasingly priced in at current ultra-low valuation multiples. I reiterate a "Buy" rating on TTD, emphasizing visible margin recovery and compelling rebound potential for 2025.
The Virtus Silvant Mid-Cap Growth Fund returned +5.43% (Class INST) for the quarter, compared to the Russell Midcap Growth Index's return of +2.78%. Palantir Technologies (PLTR) and Roblox (RBLX) were among the top stock contributors. Fair Isaac Corp. (FICO) and Verisk Analytics (VRSK) were among the largest stock detractors.
The Trade Desk stock has plunged this year, even as the business continues growing rapidly. Third-quarter growth lagged that of Meta Platforms, yet the stock commands a much higher valuation.
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